Digital transformation spending to reach $2.3trn in 2023
Digital transformation spending is set to reach $2.3trn in 2023, according to a report from market intelligence provider International Data Corporation (IDC).
Among a number of findings was the prediction that over half of all ICT spending will be on digital transformation by 2023. Also of note was the suggestion that between 2019 and 2023 spending on digital transformation will grow by 17.1% year-on-year.
"We are approaching an important milestone in DX investment with our forecast showing the DX share of total worldwide technology investment hitting 53% in 2023," said Craig Simpson, research manager at IDC. "This will be the first time DX technology spending has represented the majority share of total worldwide information and communications technology (ICT) investment in our forecast, which is a significant milestone and reflective of the larger commitment to enterprise-wide digital transformation."
Manufacturing is predicted to power the growth, accounting for 30% of the total. Use cases ripe for digital transformation in the manufacturing industry include robotic manufacturing, while in industries such as retail, commerce platforms are key.
Geographically, the United States is said to be most active in the digital transformation area, delivering over a third of worldwide spending, followed by Western Europe and China. Regardless of location, manufacturing and supply chains are said to be the engine of the growth in digital transformation spending.
The road ahead is not without pitfalls, however. McKinsey said in 2016 that 70% of digital transformation spending is wasted.
Alex Guillen, Technology Strategist at Insight, comments: “With this rising investment and expectations come increasing pressure on IT teams – who have to both drive innovation and manage core infrastructure and operations. In fact, in Insight’s Intelligent Technology Index 66 percent of CIOs feel that IT is being set up to fail, taking on more responsibility for transformational projects, while still keeping core systems running effectively. There is no quick fix to reconciling this burden; investment and technology alone won’t solve the pressure IT teams are under. Instead, digital transformation needs to be an enterprise-wide priority, with responsibility shared across the business. Without this change in corporate culture, the pressure on IT teams will only increase.”